39% planning pay rises below retail prices index

More than a third (39%) of respondents are planning a pay rise below the retail prices index (RPI) or intend to increase pay for certain staff only, according to research by the Confederation of British Industry (CBI) and Accenture.

The CBI/Accenture Employment trends survey, which surveyed 325 employers with more than one million employees, found that only 7% of respondents said they intend to raise pay by more than RPI, while almost half (42%) expect to increase pay in line with RPI inflation.

Only 8% of respondents are planning to freeze pay at their next pay review.

The research also found:

  • 42% of respondents said wages can only rise in line with productivity gains and skills progression.
  • 43% of respondents said the living wage is useful as a voluntary reference point, while 12% believe there should be any legal obligation to the living wage.
  • 97% respondents said flexible employment patterns, such as the use of agency workers and zero-hour contracts, are either vital or important to the UK economy.

Katja Hall, chief policy director at CBI, said: “The minimum wage successfully acts as a floor on pay, protecting workers while ensuring jobs can continue to be created. 

“The living wage can only remain an aspiration that helps some employers pay more, but it must remain voluntary. Moving to a statutory approach would undoubtedly hit jobs and opportunity.

“Most organisations believe that flexible employment patterns, including agency and zero-hours work, are a critical tool when demand fluctuates and a firm needs to react quickly. These contracts create opportunities for people looking for work that might not otherwise exist, and also attract investment to the UK.”